A wall at 25 Broad St. has cracked, causing concern from the City of Hillsdale. Joshua Pal­adino | Col­legian


The City of Hillsdale has delayed the demo­lition of a con­demned building downtown, as a county court pre­pares to hold a fore­closure hearing.

The structure at 23 and 25 N. Broad St. still stands, even though the city’s office of code enforcement con­siders it a threat to public safety.

The city ordered the owner, Mortgage Man­agement LLC, to repair or demolish the building by Jan. 23. Now, the Hillsdale County Circuit Court will decide whether to fore­close the property because of unpaid taxes on Feb. 28. City offi­cials indi­cated that Hillsdale County will likely take own­ership of the building.

Jeff Fazekas co-owns Mortgage Man­agement LLC. The county fore­closure notice also listed James Daniels and Carol A. Daniels as having a recorded interest in the property.

Tim Dixon of Dixon and Rahe Attorneys at Law is the owner of 27 N. Broad Street, which stands adjacent to Mortgage Man­agement LLC’s property.

He claimed the dis­repair of his neighbor’s building caused damage to his building.

“I had to pay to get my own foun­dation rein­forced,” Dixon said, adding that it cost him about $3,800.

Mortgage Man­agement LLC stopped paying taxes in 2009. After three years of delin­quent taxes, the county can fore­close on a property and resell it, according to Dixon. Instead, Beth Sanford, deputy book­keeper at the Hillsdale County Treasurer’s Office, said the county granted the owners a hardship, meaning the county tem­porarily waived their tax bill.

Mortgage Man­agement LLC owes more than $50,000 in back taxes, according to Planning and Zoning Admin­is­trator Alan Beeker, who works for the Hillsdale Office of Code Enforcement.

“It should’ve been handled six years ago,” Dixon said. “If they had fore­closed it and sold it to someone who would’ve taken care of it, then it wouldn’t have gotten so bad.”

A large crack runs down the southwest corner of the building. The city tried to rein­force it a few years ago, but Dixon said it has only gotten worse. Hillsdale Code Enforcement put a barrier around the building to protect people from the crum­bling structure.

Fazekas said the building is in dis­repair, but does not pose a threat to the public.

“There are things that need to be done, but because of the city harassment and basi­cally not allowing me to have use of the building, I haven’t been in the building in two years, and we haven’t done any­thing, because we can’t do any­thing,” he said.

Beeker said his office enforces city ordi­nances about blight and dete­ri­o­ration. He said they contact Fazekas fre­quently because his building doesn’t meet city codes.

“It’s not harassment, because he’s not obeying the law,” Beeker said. “It would be like saying the police were harassing somebody for speeding.”

Fazekas said the Tax Increment Finance Authority, the city’s eco­nomic devel­opment agency, has tried to acquire the property.

TIFA selec­tively sub­si­dizes business owners, pro­viding them with grants to restore dilap­i­dated buildings that are lia­bil­ities — that is, the cost to repair them or tear them down is higher than the value of the property. Since prop­erties in which lia­bil­ities exceed value simply dete­ri­orate, the TIFA Board grants money to business owners who present devel­opment plans that meet its eco­nomic goals.

Fazekas said rather than working with him, the TIFA board wanted to take his property and sell it.

He said he didn’t know why the TIFA board wouldn’t work with him. He added that the City of Hillsdale never con­tacted him about TIFA until after it con­demned his property.

Mary Wolfram, the city’s former director of eco­nomic devel­opment, said she spoke with Fazekas after the city con­demned the property.

“I told him, ‘If you’re willing to donate the building to TIFA, they would accept it,’” Wolfram said.

Fazekas said the city inspected the building without his per­mission in Feb­ruary 2015.

“TIFA board members talked about acquiring the building,” Fazekas said. “TIFA okayed, on Jan. 20, 2015, for Beeker to look at the building. They sent Beeker out in Feb­ruary to go through the building and fab­ricate that the building is going to col­lapse and the whole block is at risk of falling down.”

Fazekas said he didn’t know how Beeker and the inspector got into the building, since he did not give them per­mission.

“Since they ‘did an inspection’ and con­demned the building without informing me, and they didn’t have a search warrant, the Fourth Amendment was vio­lated in this par­ticular sit­u­ation,” Fazekas said.

Beeker said Rick Roth, a real estate agent in Hillsdale, had the keys and let him into the property. Roth cor­rob­o­rated the statement.

But Fazekas ques­tioned how Roth obtained the keys, since he wasn’t his realtor.

Fazekas said he had the property listed with Don Helton, owner of Don Helton Realty in Hillsdale.

“I most likely called Don Helton and got the keys from him to show it to my buyer,” Roth said. “That would be common practice.”

Beeker, however, said he inspected the building with Roth and an architect from Adrian.

Roth said he went into the building to show it to a prospective buyer, not for an inspection.

“I had an inquiry on it, and a cus­tomer was inter­ested in seeing it,” he said. “I’m not sure why Alan came along. I don’t recall why he did, but, yes, he was along when the client and I looked at it.”

Roth said the inspection was visual, and that’s “not out of the ordinary.”

“I don’t recall any pic­tures being taken. There was no mea­suring, that type of thing,” Roth said. “I do know that they detected quite a bit of wall movement.”

If the architect did inspect the building, Fazekas said there was a con­flict of interest anyway. He said Siler Asso­ciates Inc., a long-time employer of Beeker, con­ducted the inspection.

Wolfram recalled a dif­ferent story about the inspection.

“It was an outside inspection,” she said. “He had not given the city per­mission to go inside the building, so it was an outside inspection.”

Although the inspection occurred in Feb­ruary 2015, Fazekas said the architect did not email the city until May 2015. Once the architect informed the city about the building’s con­dition, it took offi­cials until Dec. 17, 2015, to condemn the property.

“It’s in such dis­repair that the whole block is going to fall that it took them until Dec. 17 to condemn the building?” Fazekas said.

The city’s statement said the building “is likely to par­tially or com­pletely col­lapse, or some portion of the foun­dation or under­pinning of the building or structure is likely to fail or give way.”

Roth noted that during the walk­through, the city posted a warning for Dixon, the owner of the next door building, asking him to ensure that his building’s walls were not shifting.

On Dec. 18, the day after the city con­demned the building, Fazekas said he received the pre­vi­ously men­tioned call from Wolfram.

“She stated that they want me to give them the building and that it would be a great tax write-off for me,” Fazekas said. “They weren’t wanting to pur­chase it for what I had it listed for pre­vi­ously, but they were more inter­ested in me giving it to them.”

Fazekas said he asked Wolfram whether she would work with Mortgage Man­agement LLC to get the company TIFA grants, to which she responded that she would not.

“His char­ac­ter­i­zation is that no one would work with him,” Wolfram said. “The city’s under­standing of itself is that they have bent over back­wards trying to get him to work with us, to get him to fix up his own building, and to no avail.”

The city con­demned the building in December 2015, eight months after finding a major threat to  public safety. Fazekas said he then began to hire attorneys and struc­tural engi­neers to build a case against the city.

“I met with the first struc­tural engineer in March 2016, at which point he told me they’re full of [it],” he said. “The building isn’t going to col­lapse. The structure is sound. It isn’t sinking. The city was saying the soil under­neath the building is sinking, thus causing the wall to col­lapse, and that is not the case.”

Since the city hasn’t had access to the building, it has had trouble deter­mining the extent of the struc­tural issues and how serious the threat is to public safety, Beeker said.

“There are def­i­nitely bricks falling off this building,” Wolfram said. “There’s a slant to the sidewalk, and the water is running into the building.”

Although TIFA offered to take the building in 2015, dis­repair has become so severe that the city is no longer inter­ested. Fazekas tried to give the deed to the city in December 2017, but it didn’t accept it.

“The city will not take it, because he has 10 years of back taxes on the property, and it’s also mort­gaged,” Beeker said. “Unless the bank is willing to sign over the property, the city is not going to take on the property and all the debt, as well.”

Since the city won’t take the building and Mortgage Man­agement LLC has no interest in it, the fore­closure hearing will likely result in Hillsdale County taking pos­session of the property.

“The county’s never going to receive the back taxes,” Dixon said.

Beeker said the county will hold a fore­closure auction for the building in which the minimum bid will be the lien — the amount of back taxes owed on the property. If the building doesn’t sell, then a second auction will occur in which the minimum bid is $25.

But Dixon and Beeker agree: No one will buy the property.

“Who’s gonna spend $50,000 on the tax sale, when they have to spend $1 million to repair the building?” Dixon asked.

It’s also unlikely that someone will demolish the building and rebuild it.

“If they built that building and replaced it so that it was his­tor­i­cally correct, it would cost about $1.5 million, by my cal­cu­la­tions,” Dixon said.

Beeker said the city hasn’t simply let the property sit as a public safety threat; it has done every­thing it can to get Fazekas to repair or demolish the property.

“Due process dic­tates there are certain things you have to do before taking each next step,” he said. “The owner is given a certain amount of time to make amends, and then the next judgement is delivered.”

Fazekas said he doesn’t plan to show up to the Feb. 28 hearing. He’s ready for the county to take the building.

“I’m screwed,” he said. “I lost $200,000, and I’ve lost 10 years of my time, energy, and effort making improve­ments. I deal with the city on a regular basis. This is the game. The bottom line is: I’m done with it.”